Patent Suits Take Aim at Cable, Satellite Heavyweights

Holding company Acacia Research says it owns fundamental patents on digital multimedia content transmission, and it wants giants such as Comcast and Charter Communications to pay licensing royalties for use of the patents.

Acacia Research has filed suit against many of the largest U.S. cable and satellite companies, asking them to pay it royalties to license its digital multimedia patents.

The suit, filed Tuesday by the patent-holding company in a U.S. district court in San Francisco, names as defendants Comcast Corp., Charter Communications Inc., The DirectTV Group Inc., Echostar Communiucations Corp,. Boulder Ridge Cable TV, Central Valley Cable TV, Seren Innovations Inc., Cox Communications Inc. and Hospitality Network, a division of Cox.

Representatives at Comcast, based in Philadelphia, and Cox, based in Atlanta, declined to comment on the suit.

The pending litigation against the cable and satellite companies represents Acacia Research Corp.s highest-profile lawsuits to date and will potentially bring the company a windfall in licensing revenue. Company executives tipped off their plans last year, however.

Acacia claims that it owns five fundamental patents on digital multimedia content transmission (DMT) over the Internet and other media, and it has already filed similar suits against several companies in the adult-entertainment industry.

Meanwhile, Acacia has quietly signed license deals with 123 companies, including LodgeNet Entertainment Corp., T. Rowe Price Associates Inc., Virgin Radio and the licensing division of The Walt Disney Co.

If the defendants agree to Acacias licensing terms, each company would be required to pay Acacia several million dollars in royalties per year, a substantial increase from the royalties Acacia currently charges its licensees.

/zimages/6/28571.gifClick here to read about patent infringement issues surrounding the JPEG image standard.

Acacia had previously charged adult content providers royalties based on the licensees annual income. Now, it will charge broadcasters at least 50 cents per subscriber per year, with additional fees for on-demand and digital services.

Rob Berman, executive vice president of business development and general counsel at Acacia, said the company had been in contact with many of the defendants before the suits were filed.

"Some companies prefer that litigation be initiated before licensing agreements [can be signed], perhaps so theyre not seen as an easy mark," he said. "This is not something out of the ordinary. They knew we were coming."

Acacia filed its latest round of suits after it settled with and licensed On Command Corp., a video-on-demand (VOD) service for hotels whose market is shared with LodgeNet, another Acacia licensee. With the two licenses, Acacia has now licensed the VOD providers of at least 90 percent of the hotel rooms in the country, Berman said.

Next Page: Acacias royalty rates for cable and satellite providers are based on the on-demand industrys per-room fees.